5 COMMON MISTAKES THAT BUYERS MAKE WHEN APPLYING FOR A HOME LOAN

Once you have decided you are in the market for a home it does not take long before you start looking for the perfect property. You sit down set your criteria in a searchbar and start dreaming about what your new castle will look like. Stop, you just made mistake #1

1. KNOW HOW MUCH YOU CAN AFFORD BEFORE YOU START LOOKING.

Looking at dream homes on Pinterest is fine and is great for inspiration, but when looking for a serious home the first thing you need to know is how much you are approved for. Visiting a lender is not nearly as exciting as looking for homes online (Don’t you click this link until you are approved), but it is the first step in a process that if not executed correctly may make buying a home unobtainable. Buying a home is easily one of the biggest decisions you will ever make, so before going on the open house circuit you need to get into a lenders office and find out what type of budget you are working with. Don't commit yourself to 30 years of payments without doing your homework, which leads us to mistake #2

2. NOT BEING PREPARED.

When you sit down with a lender and they pull your credit score it should not feel like a surprise. Lenders are great at telling you the things you can do to improve your credit score, but changes to your credit score take time and adjustments in behavior. Having a good credit score can improve your interest rate and save you big dollars over the life of that loan. Sometimes a few simple actions can improve your credit dramatically. More then 79% of all Americans credit scores contain errors. According to the Federal Reserve 25% of credit reports contain errors that are deal breakers for lenders. Before you step into a lenders office get your credit score, if your score is not ideal consult a credit-reporting agency. Once a year you are entitled to a free credit report, utilize this resource and be informed.

3. NOT BEING HONEST.

Not so long ago there was a process of receiving loans based on income that you did not have to provide supporting evidence for. These non-document loans are now referred to as “liar loans” and many people ended up with loans that they could not afford. The days of being self-employed and not having to show your tax returns are long gone. Obtaining credit is nowhere as easy as it was, and for good reason. Don’t let your ego get in the way. You may be tempted to stretch the truth on your application to get a larger loan, but doing so will put you in jeopardy of getting your loan denied.

4. CHANGING YOUR JOB.

Employment history is key to getting approved for a loan. Most lenders will want to see 2 consecutive years of work history with the same employer. By switching jobs before or during the approval process you run risk of getting your application denied. In the best case scenario switching your job will delay the process while employment is confirmed. Do yourself a favor and wait to switch jobs until you have made your first house payment.

5. DECORATING THE HOUSE BEFORE YOU OWN IT.

Buying a house is exciting and shopping for your new house may be even more fun! Don’t even think about it. Just before closing escrow, lenders may do something called a “soft pull” of your credit. If your debt to income ratio has changed you may not qualify for your mortgage any longer. Imagine how bad it feels to purchase all of the things you want to put in your home only to find out that you no longer can afford it in the eyes of the lender. Keep you credit cards tucked away until after escrow closes and the deal is done.

The process sounds intimidating, but using the right lender in combination with the great Realtor can take most of the bumps out of the road. Just be prepared, informed and don’t make any major life changes between the application process and your closing and you will be fine.

Want to do a little searching on your own after getting approved for a loan? Let us help, use our custom search bar for information about Real Estate in the local Spokane Area, simply type in any criteria you desire and get immediate relevant results.

Investing In Real Estate In Spokane Washington 5 mistakes to avoid.

Lately we have been getting a-lot of questions about Investing in Real Estate. We believe it is partially due to the large number of short sales closing but also because Spokane is experiencing a sellers market. Right now prices are low enough that anyone with a reasonable credit score and a full time job can purchase an investment property. However there are several mistakes that first time investors make that can be easily avoided. Here are 5 mistakes first time real-estate investor makes. 

1. Being Underfunded. The math seems simple, I will buy a property for X my mortgage payment will be XYZ, I’ll increase it by 20% and Ill be paying my mortgage and making a little money on the side. If properly executed this can be true, but there are several costs to take into consideration when setting up an investment property. Factors such as closing costs, insurance, maintenance, and property taxes can eat away at profits very quickly. Make sure to talk to a professional and work to set up a budget that covers contingencies including setting up a emergency budget for unexpected costs.

2. Underestimating The Time Commitment. Being a landlord can be very time consuming. If you do not set up a clear system for working with your tenants you may find yourself living on your phone. Credit checks, rental contracts and maintenance can chip away at valuable time and resources. Consider enlisting the help of a property management company. Property management companies can provide day-to-day managers, contracts, background checks and trusted service providers to make sure that you investment is taken care of while you are looking for your next investment.

3. Knowing The Neighborhood. It can be tempting to buy a home in a not so favorable neighborhood because the price is right, just remember that someone actually has to want to live in your house for you to make money. Factors such as proximity to transportation, employment, great schools and public parks can improve the quality of the type of tenant that rents your property. It is important to look at the marketability of your property, does your property have curb appeal, what sets aside from the hundreds of other rental properties In Spokane? If your costs are fixed (which they should be if you have a proper budget) then you need to differentiate it by amenities and curb appeal and not price.

4. Miscalculating Improvement Costs. Once you have received professional estimates double their estimate both in time and cost. Unforeseen expenses always make their way into the best-planned projects. Being prepared is one of your best assets when starting your first project. After doubling your costs if you can still make money on the investment property then it is likely a good investment.

5. Not Using A Professional. Professional Realtors can save you time and money when looking for investment properties. Local Realtors not only know specific neighborhoods but they deal with other investors, vendors, and lenders on a daily basis. The professionals at Synergy Properties know the Spokane local Real-Estate market and have become experts at serving the Spokane community. Give us your your criteria and we will find a home for you. For more information contact us at (509) 624-4400 or visit us on the web. 

Want to do a little searching on your own first? Let us help, use our custom search bar for information about Real Estate in the local Spokane Area, simply type in any criteria you desire and get immediate relevant results.